Performance Chemicals segment: For April and May 2023, the company sees a sales volume decline of 13% vs. 2022 due to reductions across all product lines, except Battery Materials (on higher electric vehicle sales in China). 

For Q3 FY23, the company notes that sales volumes are improving Q/Q but at a slower-than-expected rate.

The company is witnessing weakness in China and soft global demand across several key end markets, such as construction and consumer applications. 

Consequently, CBT projects the segment EBIT to be only modestly higher Q/Q in Q3.

Reinforcement Materials segment: Sales volumes declined 8% in April and May 2023 vs. the same months of 2022 on decline across all regions, especially in the replacement tire market.

The company is experiencing a Q/Q increase in pricing and product mix and expects it to drive strong Y/Y growth in segment EBIT in Q3 and Q4 FY23.

Despite the expected strong adjusted EPS in H2 FY23 vs. H1, the company no longer expects FY23 adjusted EPS of $6.10-$6.50 for FY23.

Price Action: CBT shares traded lower by 5.94% at $70.19 premarket on the last check Friday.